Committee advances bill to authorize vehicle value protection agreements, sending substitute to rules

The House Regulated Industries Committee voted to pass a substitute for House Bill 187, a measure that would authorize vehicle value protection agreements (VVPAs) — contracts that let consumers protect equity in a vehicle after loss of value — and set consumer‑protection and financial‑backing requirements.

Representative Monahan, the bill sponsor, told the committee VVPAs would be optional and not a condition of sale. The proposed statute requires conspicuous disclosures of provider contact information, benefit terms, eligibility, claim procedures, and a mandatory 30‑day free‑look cancellation period. The committee substitute also includes financial‑responsibility rules: providers must underwrite benefits either with insurance from a licensed insurer, maintain a funded reserve equal to at least 40% of collected fees plus a trust‑secured deposit with the insurance commissioner, or hold at least $100 million in net worth.

Travis Moore, general counsel for the Guaranteed Asset Protection Alliance, testified for the industry and said the measure codifies model legislation states use to enable a market for voluntary vehicle protection products. Moore listed states with statutory frameworks (Alabama, Colorado, Florida, Missouri, North Carolina, Ohio, Oklahoma, Texas and Utah) and gave cost estimates that vary by vehicle: in some instances premiums could be as low as roughly $400–$500 and rise to $1,000–$2,000 for high‑end vehicles, depending on vehicle value and benefit design.

Committee members asked about fraud risk, product overlap with gap insurance, and regulatory placement. Moore said the substitute places oversight with the consumer protection division (rather than treating the products as insurance) and argued a clear statutory framework encourages reputable providers to offer the product while discouraging fly‑by‑night actors.

At the end of the hearing Senator Brass moved to pass the substitute; the motion was seconded and the committee recorded a 5–4 vote in favor. The substitute was passed and the bill will move to the rules calendar.

The committee also requested follow‑up details on product pricing, coverage for commercial vehicles, and fraud‑prevention mechanisms. The substitute contains a 30‑day cancellation period and explicit disclosure requirements to guard consumers who purchase the optional protection.